Introduction

An NGO is independent of Government, but it’s also not a typical private sector formation and doesn’t work in an equivalent way.

You may not form a profit from an NGO. You can, however, earn an honest salary as an employee of one, especially one that you simply have found yourself.

According to the Non-profit Organization Act 71 of 1997, NGOs fall under the category of a non-profit organization. This means that, unlike a business, an NGO shouldn’t have as its basis the motive to form profit. Therefore, if you wish to start an organization that will make a profit you may want to consider opening a regular business instead.

Instead of making a profit, NGOs are established for the benefit of the general public, and for striving towards a specific social cause. According to the Act, there is an obligation to report the finances of a registered NGO in a particular manner, and there may be harsh penalties meted out against someone who is found using the resources of an NGO.

Registration of NGO

Non Profit Organizations/ Public charitable organizations (NGOs) can be registered as Trusts, Societies, or Private Limited Non-Profit companies, under section-8 companies. Non-profit organizations in India:

• Exist independently of the state
• Are self-governed by a board of trustees or managing committee/ governing council, comprising individuals who generally serve in a fiduciary capacity
• Produce benefits for others, generally outside the membership of the organization
• Are ‘non-profit making’, in as much as they are prohibited from distributing a monetary residual to their own members.

Section 2(15) of the Income Tax Act –

The Income Tax Act is applicable throughout the Republic of India and defines charitable purposes which include relief of the poor, education, medical relief and therefore the advancement of the opposite object of general public utility. A purpose that relates exclusively to spiritual teaching or worship isn’t considered as charitable. Thus, in ascertaining whether a purpose is public or private, one has got to see if the category to be benefited, or from which the beneficiaries are to be selected, constitutes a substantial body of the public. A public charitable purpose has got to benefit a sufficiently large section of the general public as distinguished from specified individuals. Organizations that lack the general public element like trusts for the advantage of workmen or employees of a corporation, however numerous - haven’t been held to be charitable. as long as the beneficiaries of the organization comprise an uncertain and fluctuating body of the general public answering a specific description, the very fact that the beneficiaries may belong to a certain religious faith or a sect of persons of a particular religious persuasion, wouldn’t affect the organization’s public character.

A trust, society or section-8 Company, the Income Tax Act gives equal treatment, in terms of exempting their income and granting 80G certificates, whereby donors to non-profit organizations may claim a rebate against donations made. Foreign contributions to Non-Profits are governed by Foreign Contribution Regulation Act (FCRA) regulations and the Home Ministry.

Registration of NGO under the Societies Registration Act:

According to section 20 of the  Societies Registration Act 1860, the following societies can be registered under the act: charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the inspiration or maintenance of libraries or reading rooms for general use among the members or hospitable the overall public or public museums and galleries of paintings and other works of art, mechanical and philosophical inventions, instruments or designs

Societies are registered under the Societies Registration Act 1860 which may be a federal act. A society needs a minimum of seven managing committee members: there’s no upper limit to the amount managing committee members. The board of management is within the sort of administration or council or a managing or executive committee.

Registration Process:

Registration are often done either at the state level (in the office of the Registrar of Societies) or at the district level (in the office of the district magistrate or the local office of the Registrar of Societies).

The procedure varies from state to state. However, generally, the application should be submitted together with:

• Memorandum of association and rules and regulations
• Consent letters of all the members of the managing committee
• Authority letter duly signed by all the members of the managing committee:
• An affidavit was sworn by the President or secretary of the society on Non Judicial stamp paper, together with a court fee stamp;
• A declaration by the members of the managing committee that the funds of the society will be used only for furthering the aims and objectives of the society. All the aforesaid documents which are required for the application for registration should be submitted in duplicate, alongside the specified registration fee.